LONDON - A secret deal with an Iran-backed militia kept British forces out of a battle in the southern Iraqi city of Basra, leaving U.S. and Iraqi forces to fight alone, a newspaper reported Tuesday. The Ministry of Defense denied any deal was struck and said it held back to ensure that the operation was seen as Iraqi-led.

The pact between Britain and the Mahdi Army was aimed at coercing the Shiite militia back into the political process and marginalizing extremist factions, the The Times of London reported, quoting an unidentified senior defense official. But the effect was that 4,000 British soldiers were kept out of action for six days until a deal brokered in Iran ended heavy fighting.

The Times described the deal as an "accommodation," and said that under its terms, no British soldier could enter Basra, which sits 340 miles southeast of Baghdad, without the permission of Defense Secretary Des Browne.

In a statement, the defense ministry rejected the story, saying "no 'secret deal' or 'accommodation' kept us out of the city," and that the only reason British involvement was limited was to ensure the operation was perceived by residents of Basra as Iraqi-led.